Or
they can choose the Green Party’s plan for a smarter,
greener, more productive economy that is jobs-rich and
sustainable and benefits all.

Under National, the New
Zealand economy has been dramatically
simplified.

Essentially, New Zealand is increasingly
reliant on one product and, increasingly, on one
market.

National has bet the farm on the farm.

Its
solution is more dairy production, less diversity, both
economically and ecologically.

The one product/one market
approach is high risk.

But even more risky is National’s
failure to protect our environment, which is actually what
underpins our economy.

Any high-carbon economic model has
a built-in self-destruct mechanism.

National has
completely failed to grasp this.

Green plan to
return New Zealand to innovation

The Green Party
has a better idea.

We believe that to get ahead the plan
must change – we have to innovate.

And there is one
certainty about innovation – it is not business as
usual.

New Zealanders are innovative people.

We have a
can-do mentality. When people talk about No.8 wire, they are
referring to our ability to find imaginative and inventive
solutions to problems.

Economies that innovate do better
over the long-term, creating good jobs that pay well,
enabling us to live high quality lives and providing the
social services we need.

Innovation is the best way we can
add value to our exports.

If we want to provide for our
social needs and aspirations, we need to be at least as
innovative as other affluent nations.

That means making
high value-added manufactured goods and services, not simply
selling commodities like raw logs and milk
powder.

Innovation underpins success of small
advanced economies

Economist David Skilling’s
study of small countries with advanced economies such as
Denmark, Israel, and Finland found that one of the defining
characteristics of their wealth was high investment in
R&D.

Each has niche manufacturing industries that make up
significant parts of their economies, while high tech
industries make up a disproportionate share of their
exports.

Each had agricultural-based economies in the
1970s, and while they haven’t abandoned agriculture, it
now makes up a small proportion of their exports.

Unlike
the National Government, with it’s largely laissez faire
reliance on the market, in each of these overseas cases the
state has played a very conscious and significant role in
promoting research.

The state didn’t pick winners but it
certainly picked sectors which the government supported.
And they certainly invested more than we currently
do.

From those state initiatives, start-ups in the private
sector evolved.

Shortcomings of National’s
innovation programme

National has done a lot of
talking about innovation.

Steven Joyce increased the
frenetic pace of restructuring the government innovation
system, and produced 100-point lists of actions.

But for
all the talk, and 100 point lists, there is one figure that
tells the real story.

The 10-year outlook of the National
Statement of Science Investment shows research and
development spending will actually fall, in real terms by 21
percent.

That’s right – National is about to make
major cuts to research and development funding.

When New
Zealand already invests only roughly half of what most other
developed countries do in research and development, and
considerably less than other small, advanced economies,
these further cuts are a disaster for R&D and our capacity
to innovate.

And if the funding cuts weren’t bad
enough, Steven Joyce has also strapped innovation in a
straitjacket with his grants system.

By putting himself at
the centre of a complex web of R&D funding, Steven Joyce is
denying businesses the freedom to innovate on their own
terms.

At present, New
Zealand innovators are starved of the resources needed to
turn our breakthrough moments into valuable
solutions.

Both our public and private sectors
under-invest in innovation.

Public sector leadership is
lacking because of under-funding; and the private sector
under invests, in part because of poor public sector
leadership.

Our universities are slipping backwards in
international rankings and we patent relatively few new
ideas.

Scientists and innovators are sick of endless
restructurings. Many have simply left.

That is indicative
of the gap between National’s rhetoric on innovation and
the reality.

Policy to transition from commodity
dependence to innovation

As I said, this year’s
election gives people a real choice.

Today I am announcing
that the Green Party’s economic priority for the election
is building a smarter greener economy that benefits every
New Zealander.

In order to build a smarter economy we need
to invest in innovation.

Today, I’m announcing that the
key policy points in the Green Party's plan for an
innovative economy are:

1. $1 billion of new
government funding over three years for research and
development, kick-starting a transformational shift in how
our economy creates wealth.

2. The Government taking a
collaborative partnership approach to innovation with the
private sector, which will include:

a) R&D funding
made up of tax credits and grants;

b) a requirement for
firms that go into overseas ownership to repay their grants;

c) a new voluntary option for large grants, where
companies that receive significant taxpayer funds agree to
the Government taking an equity stake in their
business.

3. Enhanced incentives to study and teach
engineering, mathematics, computer and the physical
sciences. The Green Party will fund an additional 1,000
places at tertiary institutions for students of engineering,
mathematics, computer science, and the physical sciences –
our future innovators – costing $50 million per
year.

These policies will help secure our long-term
prosperity by significantly ramping up our investment in
innovation.

Innovation and know-how can enable us to do
more with less, better protecting the natural world we all
love whatever our political hue, while allowing us all to
live prosperous, fulfilling lives.

Tax credits as
well as grants

The centerpiece of this policy is
an additional $1 billion of government investment in
research and development above current spend.

The one
billion dollar investment will be directed to both the
public and private sector.

As well as direct funding to
scientific institutions and businesses via grants, we will
offer tax credits to encourage the private sector.

Tax
incentives are the simplest way to encourage R&D investment
and don’t carry the political transparency risks inherent
in direct grants.

We want to provide business with the
freedom to innovate. A tax credit creates a level playing
field and means businesses can get government support for
R&D without all the paperwork and bureaucracy inherent in
the current system.

We want business to get on with
innovating now. A tax credit is the simplest and quickest
way to spur R&D activity.

However, there is still room
for direct government grants in our R&D system.

We will
ensure greater investment is made in promising new paths in
the ICT, renewable energy, and manufacturing sectors as well
as adding sustainability as one of the criteria for
considering grants.

In time, we expect the private sector
to match the government’s increased investment to bring us
closer to the OECD average.

In Finland, for every $1 the
government invested, the private sector invested $3.

A
hybrid model of tax breaks and direct grants, underpinned by
much higher levels of government funding, will mean more
businesses invest in R&D transforming the way our economy
produces wealth.

Investing in people

We
will also invest in people.

Currently we don’t have
enough engineers, scientists, mathematicians and computer
scientists.

The Green Party will fund an additional 1,000
places at tertiary institutions for students of engineering,
mathematics, computer science, and the physical sciences,
costing $50 million per annum.

We will establish funds for
these sectors to promote post graduate work.

We will
promote these sectors to prospective students via a national
advertising campaign.

And we will support industries to
employ tech graduates.

Recognising the importance
of start-ups

We also recognize the importance of
start-ups.

Successive Governments have underestimated
their significance.

In the US, for example, all net new
jobs since 1980 have come from companies less than five
years old.

We will review the stock option tax regime for
new enterprises to make such schemes fairer and more
viable.

We will also establish a regime within Immigration
New Zealand to support entrepreneurs, and not just rich
people, to move here.

Green Investment
Bank

In terms of access to capital, we have
already announced that we’d establish a Green Investment
Bank to help lead the transition from an economy with a
heavy carbon footprint to a smarter, greener one.

The
estimated potential market share of the global green economy
available to New Zealand is up to $22 billion annually –
much more that current earnings from dairy.

The Green
Investment Bank initiative has been warmly received across
the banking and business world. It will underpin a necessary
deepening of the capital markets.

Our decision to put a
price on carbon will also drive innovation by incentivizing
carbon efficient investments and technologies.

Using the
revenue from the carbon tax to cut company tax rates will
give smart green businesses a double
dividend.

Conclusion

The opportunities
for New Zealand are there, and they’re exciting.

The
Green Party will ensure we seize them with both hands.

At
present we have a Government whose thinking is stuck in the
last century – promoting a commodity-based economy and
subsidizing fossil fuels. This is National’s pollution
economy.

The Government’s own 2011 review of the
innovation sector recommended ‘progressive increases in
Government investment in R&D…to at least match the OECD
average’, but the Government’s funding plan is taking
our economy in the opposite direction.

National has it
wrong when it comes to R&D. They are cutting funding and
micro-managing the grants system, while steering what grants
there are into pollution generating activity.

Voters have
a choice. National’s simplified pollution-economy that
creates few jobs and delivers uneven results.

Or a smarter
greener economy where innovation flourishes and we develop
high end export products the world needs.

National likes
to paint the Green Party as anti-business. But the bottom
line is that National plans steep cuts to R&D and the Green
Party will significantly increase government investment in
R&D.

We are also the only party that has so far announced
a cut in the corporate tax rate for this election.

And we
are now the only major party going into this election
pledging significant additional R&D investment to spur
innovation in our economy, including through business tax
credits.

Under our policy more businesses can participate
in R&D through tax breaks, while the government can refocus
the grants system towards research into building a cleaner
and smarter economy.

Under our innovation policy,
companies will be better off.

Our vision is of a society
that develops its wealth by tapping into New Zealand’s
can-do spirit and using our smarts.

Innovation is in our
blood.

People like Bill Hamilton of jet boat fame, Bill
Gallagher who developed the electric fence and Rod Drury who
is building Xero into an accounting software giant.

We
have a rich history in innovation – let’s honour it, and
build a more diverse and robust economy – one smarter,
cleaner and
greener.

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